{"id":1004332331,"date":"2019-06-20T12:07:54","date_gmt":"2019-06-20T20:07:54","guid":{"rendered":"https:\/\/www.commercialsearch.com\/news\/?p=1004332331"},"modified":"2019-07-01T07:15:09","modified_gmt":"2019-07-01T15:15:09","slug":"new-issue-cmbs-spreads-to-swaps","status":"publish","type":"post","link":"https:\/\/www.commercialsearch.com\/news\/new-issue-cmbs-spreads-to-swaps\/","title":{"rendered":"New-Issue CMBS Spreads to Swaps"},"content":{"rendered":"<h2>basis points<\/h2>\n<div id=\"attachment_1004332208\" style=\"width: 560px\" class=\"wp-caption alignnone\"><a href=\"https:\/\/www.commercialsearch.com\/news\/wp-content\/uploads\/sites\/46\/2019\/06\/719_MBA.png\"><img loading=\"lazy\" decoding=\"async\" aria-describedby=\"caption-attachment-1004332208\" data-attachment-id=\"1004332208\" data-permalink=\"https:\/\/www.commercialsearch.com\/news\/new-issue-cmbs-spreads-to-swaps\/719_mba\/\" data-orig-file=\"https:\/\/www.commercialsearch.com\/news\/wp-content\/uploads\/sites\/46\/2019\/06\/719_MBA.png\" data-orig-size=\"800,557\" data-comments-opened=\"0\" data-image-meta=\"{&quot;aperture&quot;:&quot;0&quot;,&quot;credit&quot;:&quot;&quot;,&quot;camera&quot;:&quot;&quot;,&quot;caption&quot;:&quot;&quot;,&quot;created_timestamp&quot;:&quot;0&quot;,&quot;copyright&quot;:&quot;&quot;,&quot;focal_length&quot;:&quot;0&quot;,&quot;iso&quot;:&quot;0&quot;,&quot;shutter_speed&quot;:&quot;0&quot;,&quot;title&quot;:&quot;&quot;,&quot;orientation&quot;:&quot;0&quot;}\" data-image-title=\"719_MBA\" data-image-description=\"\" data-image-caption=\"&lt;p&gt;Source: Mortgage Bankers Association&lt;\/p&gt;\n\" data-large-file=\"https:\/\/www.commercialsearch.com\/news\/wp-content\/uploads\/sites\/46\/2019\/06\/719_MBA.png?w=800\" class=\"wp-image-1004332208\" src=\"https:\/\/www.commercialsearch.com\/news\/wp-content\/uploads\/sites\/46\/2019\/06\/719_MBA.png\" alt=\"\" width=\"550\" height=\"383\" srcset=\"https:\/\/www.commercialsearch.com\/news\/wp-content\/uploads\/sites\/46\/2019\/06\/719_MBA.png 800w, https:\/\/www.commercialsearch.com\/news\/wp-content\/uploads\/sites\/46\/2019\/06\/719_MBA.png?resize=300,209 300w, https:\/\/www.commercialsearch.com\/news\/wp-content\/uploads\/sites\/46\/2019\/06\/719_MBA.png?resize=768,535 768w\" sizes=\"auto, (max-width: 550px) 100vw, 550px\" \/><\/a><p id=\"caption-attachment-1004332208\" class=\"wp-caption-text\">Source: Mortgage Bankers Association<\/p><\/div>\n<p>In a search for yield and a vote of confidence in the assets, investors have pulled commercial mortgage\u2010 backed securities (CMBS) credit spreads lower in recent years. In CMBS, cash flows from mortgages are pooled and then paid out through a waterfall\u2014with payments going to higher\u2010rated bonds first and lower rated bonds last. Lower\u2010rated tranches are the first\u2014and usually only\u2014bonds to experience any losses. In the chart above, the spreads between swap rates and CMBS yields for safer, higher\u2010rated bonds are on the left, and spreads for more risky, lower\u2010rated CMBS bonds are on the right.<\/p>\n<p>In recent years, investors have reduced the spreads they demanded to invest in CMBS bonds across this credit curve\u2014with the spread for 10\u2010year senior AAA bonds falling from 136 basis points (bps) at the end of 2015, to 101 bps at the end of 2016, and 76 bps at the end of 2017. Spreads rose to 106 bps at the end of last year\u2014primarily due to year\u2010end market volatility\u2014but have since settled back to 83 bps as of last week. In addition to the credit curve coming down, it has also flattened, with the spread between single\u2010A and triple\u2010A CMBS bonds tightening from 207 bps at the end of 2015 to 84 basis points at the end of 2019.<\/p>\n<p><i>Jamie Woodwell is&nbsp;the Mortgage Bankers Association\u2019s vice president of&nbsp;commercial real estate research.<\/i><\/p>\n","protected":false},"excerpt":{"rendered":"<p>In addition to the credit curve coming down, it has also flattened, with the spread between single\u2010A and triple\u2010A CMBS bonds tightening from 207 bps at the end of 2015 to 84 basis points at the end of 2019.<\/p>\n","protected":false},"author":1097,"featured_media":1004332208,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"_jetpack_memberships_contains_paid_content":false,"footnotes":""},"categories":[37753],"tags":[34040],"class_list":["post-1004332331","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-research-center-finance","tag-mortgage-bankers-association"],"acf":[],"yoast_head":"<!-- This site is optimized with the Yoast SEO Premium plugin v28.0 (Yoast SEO v28.0) - 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